BitCoin CryptoCurrency Investment

Information from Ajay Kumar, the chairman and managing director of Fox Petroleum, about the company’s operations in India and their upcoming international projects. Fox Petroleum is headquartered in USA & New Delhi and Offices at Oman, Bahrain, Iran, Sydney, Malaysia, Bangladesh, Ireland, Ghana, Nigeria, Afghanistan, Russia, Greece, Paris and London and operates Asia’s largest LNG terminal in Karawar, India and to go for Oman India Pipeline – The Gas Highway.

The government is trying to impose very high standards on companies in the energy sector. If we were to invest USD 2 billion-5 billion, we would have a chance at being awarded one of the blocks. I think it will be hard to find businesses willing to invest such sums of money in India.

The revenue-based scheme, while overall impressive, could still use a few improvements. I believe the government is working hard to streamline these improvements.

The exploration and production sector in India is funded solely by foreign direct investment. This is a problem. A technological-financial collaboration needs to be put in place. The financial side of this collaboration could be done anywhere, but it would be very difficult to find someone willing to provide the technology.

Most of the technical expertise comes from the USA. One American company is willing to partner with us, but they cannot have two agreements operating at the same time. The law in India forbids having two partners. Even if a company was able to fulfil all of its obligations, it would still not be allowed to sign a second agreement. I think this should not be the case.

We plan to shift our focus away from crude oil towards LNG in the near future. However, as of right now, we have two key projects in India. 2. We have signed an agreement with – Govt. of Karnataka, India; The project will be developed in Karwar District of Karnataka; India. Floating Storage Regasification Unit (FSRU) LNG Terminal Offshore to process 1 billion cubic feet (bcf) of gas per day and a storage capacity of 330,000 m3 of LNG Onshore and same capacity Offshore to cater the Energy Need of the State of the Karnataka (India); In addition, we have been working on the Oman–India multipurpose energy pipeline since 2009. The project is worth around USD 5.6 billion. We expect to transport 8 tcf [227 bcm] of natural gas to India via the Arabian Sea over the next 20 years. The project will be financed by Fox Petroleum’s equity.

Our parent company has many branches. This includes Fox Petroleum Dubai, Fox Petroleum Bahrain and Fox Petroleum US. If there is an investment-heavy project in India, we can take the budget surplus of a sister company and redirect it towards the Indian project. We will provide 62% of the funds for the new pipeline. The rest will be covered by the government.
Our gas power plant project in Bihar was delayed because the pipeline was not built. However, the pipeline will soon be completed and it will be transferred to the contractor immediately. Globally, we work with all of the main contractors – GE, Rolls Royce,Siemens, Škoda and Rosneft, Hyundai Heavy Industries, Samsung Shipbuilders, Posco Daewoo etc .

Karwar is an FSRU worth is USD 1,038 million. It will feature both offshore and onshore storage. We signed a memorandum of understanding with the government of Karnataka during the Invest Karnataka 2016 conference. The project will be completed on January 26, 2019. Samsung and Hyundai are both fighting for a new FSRU contract. I hope Samsung will win, but I cannot guarantee the outcome.

Fox Petroleum has its own gas supply resources, some of which are in Afghanistan under talks and in Russia as well as we expanding it to African resources like Nigeria, Ghana, Angola. If needed, we are able to bring in Iranian and Russian gas as well. We count on the Chabahar port [in Iran] to start running soon. This would help ensure the supply of gas.

We are currently working on a 224 square kilometre gas exploration project in Astrakhan. Most likely, we will be able to get gas from Australia in the near future as well. Australia is currently in the midst of an election cycle. Once it is finished, we will sign a contract to supply the country with LNG for 25 years.

We will use our terminals to their fullest extent. We will also use trucks in order to supply gas stations with LNG. Later, we plan to install LNG gas stations all over India.

The price of LNG at the well field is USD 0.80 per million Btu in 2016 net just add other cost to evaluate the price for supply, but it will be different on the basis of supply thru ship or pipeline. There are also capital expenditure costs, operating costs, billing charges and the cost of the pipeline itself. If LNG is exported by ship, there are additional gasification and liquefaction charges. Without these added costs, gas would be very cheap.

Some companies in the oil and gas industry suffer from poor management. That is why the price of crude oil is so high. It should be lower than the current price of USD 104 per barrel. The exploration cost is USD 8 per barrel and the packaging cost is USD 5 per barrel. One of the most accurate crude oil prices I have seen is around USD 48.26 per barrel. It represents the true cost of gas in the market.

India is experiencing a surplus gap. There is a vacuum, and we are trying to fill it. If more companies entered the Indian market, our company’s value would increase. This is because we were early adopters of new technology. While government projects in the hydrocarbons industry exist, their capacity is small. The Dahej LNG Terminal in Gujarat is one such example.

Supply and demand is very diverse in this industry. Companies can supply as much oil and gas as they want to. This is one of the reasons why we entered the market. The government has made doing business here a lot easier and allowed Indian companies to be exempt from import duties for LNG import.

The biggest hurdle we face is the No Objection Certificate. Getting clearance for it is very difficult in India. Every time we go to the ministry, we have had to deal with different people because the ministry’s personnel changed every day. This used to be the case, but now that a stable government is in power, the situation is different. We can safely do business for another 5 years.

However, I think that more reforms are needed. Communicating with the government is still very difficult. They are not easily accessible. India has both a federal government as well as various state governments. The state officials often clash with the central government. When this happens, it is the business people that suffer.
The central government is run by the Bharatiya Janata Party, but the state government is run by a different party. There are times when we are kicked around the frontlines of these two parties like a football. The situation can get very bad. For example, I had to wait for 10 years in order to set up my business in India.

Land acquisition has not been a problem for us so far. We make sure that we approach the government in an intelligent manner. We insist that land acquisition is the government’s problem, not ours. Therefore, we ask every government that we deal with to acquire land for us. We do not participate in public land acquisitions and we do not convert agricultural fields into industrial property. This would take up too much time. We would also face the risk of running into various judicial issues.

Dealing with the Indian judiciary system can be very difficult. I am not happy with the way they work. Nevertheless, every decision has to go through court nowadays. This is really bad for local businesses and foreign investors.

This government has trouble trying to leverage between the interests of the common people and what is best for business. The courts look after the people’s interests. We have the country’s best interest in mind. There is a gap between the two. Sometimes the court is narrow-minded and goes against the interests of businesses. They do not see that what is good for business is also good for the people. Indian courts have even passed legislation that runs against the government’s interests.

We have an office in Nigeria. We plan to develop an oil and gas exploration and processing project there. The Nigerian government invited us to sign the project’s papers on July 27, 2016. We also want to explore our options for gas exploration in the Amu Darya basin. Fox Petroleum hopes to secure the gas that will be transported to Turkmenistan and Iran. From there, gas will be further exported to other countries. Our firm has a presence in South Africa as well. In 2015, we purchased 51% of a Zululand company for USD 9.2 billion. The acquisition was an enormous financial undertaking. Swaziland and other countries will be able to use the South African pipeline. It will provide gas to the global market.

Personally, I am not very interested in profits. Instead, I hope that Fox Petroleum will remain the number one oil and gas company until 2020. I will resign from the chairman position that year. I hope to make good use of India’s western coast for future LNG projects. We have a large share of the market, and this position satisfies us. We hope to continue doing business on a global scale – in Sydney, India (Andhra Pradesh), Durban, Nigeria Bangladesh and India (Bangalore). We hope to pump out a very large amount of gas and leave no place in India undeveloped.